Effects of China's BT-to-VAT Reform on Listed Companies' Turnover Tax Burden

Using the data of China's listed companies during 2010-2014 as samples, this paper employs the PSM and DID methods to respectively investigate the effects of BTto-VAT reform on the turnover tax burden for companies in pilot regions(Shanghai and eight other provinces and municipalities) and the rest of China. Our study arrived at the following findings: Compared with pilot sectors in non-pilot regions, BT-to-VAT reform has no significant effect on the turnover tax burden of pilot companies in pilot regions; compared with non-pilot companies, BT-to-VAT reform slightly increased the turnover tax burden in the short run and somewhat reduced the turnover tax burden for pilot companies in the long run. Further differentiation of ownership nature led to the discovery that BT-toVAT reform somewhat reduced the turnover tax burden of SOEs and central SOEs, slightly increased the turnover tax burden for non-SOEs and local SOEs in pilot regions, slightly increased the turnover tax burden in the short run and somewhat reduced the turnover tax burden in the long run after nationwide pilot programs were introduced; BT-to-VAT reform has more significant effects on non-SOEs and local SOEs. In general, BT-to-VAT reform has no significant effects on the turnover tax burden of companies and after differentiating pilot regions, pilot sectors and ownership nature, we did not discover any significant effect, which is generally consistent with policy expectations.

Analysis on the Influence of "Replacement of Business Tax by Value-added Tax" on the Cost of Highway Projects

The"replacement of business tax by VAT reform"(hereby refer to as"VAT reform"for short)is a newly promulgated and implemented tax policy,and its impact on various industries in China is very different,and the highway project industry is no exception.The implementation of the"VAT reform"will not only have a positive impact on the cost of highway projects,but will also have some negative impacts.For this reason,highway project construction corporates must actively respond.The author explores and analyzes the positive and negative effects of the"VAT reform"on the cost of highway projects,and proposes a reform strategy for highway project cost work under the background of the"VAT reform",in hope of helping with bringing out the intrinsic value of highway project cost management work.

Value-added Tax and Leverage:Evidence from China's Value-added Tax Rate Reform

This paper uses China's value-added tax(VAT)rate reform as a quasi-natural experiment to identify the impacts of VAT rate shocks on corporate financial leverage.The results indicate that the reform reduced corporate total leverage significantly.There was a decrease in short-term leverage,but long-term leverage showed no significant change.These results remained robust across a series of robustness checks.Mechanism analysis shows that increasing profitability and improving cash flows acted as intermediary channels for the reform's impact on leverage.The reform also contributed to the mitigation of the asset–liability mismatch problem and the reduction of debt risk,while having no apparent impact on corporate investments.Finally,enterprises with more elastic demand and those with lower intermediate input ratios were affected most by the deleveraging effect of the VAT rate reform.This study suggests how the VAT rate cut shaped corporate capital structure.It thus helps to explain the economic consequences of VAT rate shocks.

Adjustment costs of institutional tax changes from the audit pricing perspective: Empirical evidence from the VAT reform

Institutional changes inevitably impose adjustment costs on firms while also generating benefits.However,empirical evidence regarding the adjustment costs of institutional changes is limited,with much of the focus centered on benefits.Using data on China’s A-share listed companies from 2010 to 2018 and the nation’s staggered adoption of the"business tax to value-added tax reform"(hereafter,"VAT reform")as a natural experiment,we examine the impact of this reform on a particular corporate cost:audit fees.We find audit fees to be 8.11%higher for VAT reform firms than for non-VAT reform firms.This difference does not exist before or after the reform year.That is,it is only observed in the year of VAT reform implementation.This indicates the existence of an adjustment cost specifically related to the VAT reform.Furthermore,we observe larger fee increases among firms audited by Big 4 international audit firms,firms that require more audit work,firms that are more complex,and firms with weak internal controls.From the audit pricing perspective,we provide evidence of the economic consequences of tax reform.The corporate adjustment costs that arise from institutional changes deserve more attention from decision-makers.